A complaint he made in January 2013 about the theft of expensive paintings from his Salerno house could have done Vatican Monsignor Nunzio Scarano more harm than good.

The monsignor was arrested earlier this week for suspicion of smuggling into Italy 20 million euro from Switzerland for his friends in the shipping business. With questions now of his possible involvement in money laundering, the stolen paintings and other expensive items inside his apartment is being seen as an indication of his possibly being engaged in illegal activity.

The value of the stolen paintings was estimated at 6 million euro. Among those filched from his apartment were six masterpieces by Giorgio de Chirico, one by Renato Guttuso, another believed to be by Marc Chagall and other religious art.

The paintings used to line his walls and hallways that were divided by Roman-style columns.

"We asked ourselves how did this monsignor come to own this place and posses these expensive works of art," Reuters quoted a senior investigator who requested that he not be identified.

The prober said Mr Scarano insisted the art work were all donations. However, he said the priest living in a luxury apartment, fit to be featured in The Lifestyle of the Rich and Famous, led the team to suspect at least some of the monsignor's work could have come from illegal activities.

The luxury apartment measures 700 square metres and is located along Via Romualdo Guarna. When the investigators followed his paper trail, it led to the Vatican bank where Mr Scarano has connections, and showed a fat bank account, stocks and part ownership in three real estate companies in Salerno.

The investigation also uncovered that the monsignor withdrew in 2012 560,000 euro from his account at the Institute for Works of Religion - more known as the Vatican Bank - to pay the mortgage of his apartment he bought for 1.7 million euro.

But his lawyer, Silverio Sica, said the monsignor used the proceeds of the property sale to build a home for terminally ill people.

The Salerno probers are still waiting for more information from the Vatican Bank which promised to cooperate in the investigation, while the monsignor, locked inside the Queen of Heaven jail, insisted he did nothing wrong in bringing into Italy the 20 million euro because he did not profit from the activity.